Good vs Bad Outsourcing

Don't know where or if my statements veered off course, but businesses SHOULD concentrate on their core competency, and possibly outsource the areas that are NOT within their core competency.

Look - I know what you are all saying about the path of outsourcing IT. I was, am, and will continue to be a tech?regardless of my current position. I understand the value of internal, competent IT techs that grow in knowledge and experience within a company. I am not saying that outsourcing is the answer to all cost issues. I do have a prediction about the near future of outsourcing?and it?s not very bright.

On a parallel note: get ready to pay more for your products and services, especially American made products.

The pendulum is swinging in the opposite direction now. For a while, we?ve (the consumers) have wanted more for less. That is why these cost saving practices are so hot right now. But now it?s going to swing the other way and have better product and services?but for more money. Soon the American consumer will demand better quality in its consumables. I am one that is all for that because I?ve had a microwave and dish washing machine go bad in the last six months, and neither was more than 3 years old. My parents had most of their appliances for DECADES. So in order to compensate for internal specialists, companies are going to raise prices. A $700 dish washer will cost you $1000. A $300 microwave will cost $450. And tech support on our PCs will actually cost money. Eventually the pendulum will swing back the other way and the public will want more affordable products again, and they?ll probably be able to get them from a new focus for our dissatisfaction: foreign companies.

Most "strategic thinking" from the business side extends no further than this coming Friday's corporate guidance that is disseminated to stock market analysts.

Just wait untill they start outsourceing CEOs.
I'll bet it stops.

So what additional value am I getting out of the $70K onshore MS Exchange admin that I can't get out of the $15K India-based Exchange admin?

Newsflash - A great deal of the India admins with whom I've worked are more technically proficient than the US-based ones. And they're cheaper. And I don't suffer in quality.

So what's my motivation to not outsource a function like Exchange administration?

because you are not thinking clearly.

"Look, all I?m saying is that outsourcing CAN work if there is a commitment from employees to make it work."

And all I am saying is NO it CAN'T. You CAN say, IF pigs had wings, they COULD fly but you still can't make a pig fly. Outsourcing IT cannot work simply because it flys in the face of basic human psychology. Work is not just an economic activity. There are social and cultural elements to work that outsourcing can NEVER serve. These elements will doom any attempt to outsource "CRUCIAL" IT processes (and IT is crucial).

How many of the responses in this discussion are about actual successful outsourcing attempts?

First of all, my company's implementation of outsourcing did NOT include our "crucial" IT resources, and no where in my previous comments did I say you should outsource crucial people. We outsourced areas where we could leverage a vendor's expertise and improve the service value. And guess what...it's working pretty well. Yes, it was a culture change that the employees had to adapt to, but we have matured the relationship with the vendors to the point where we have significant, measurable improvements in those areas. On top of leveraging their experience, their reporting has helped us to perform root cause analysis to fix many of the problems that had been plaguing us for years before we brought them in.

In your expert opinion, all IT is crucial. So to you, a help desk person who resets passwords and unlocks user accounts is a task that can only be handled by an internal employee? And a break/fix A+ certified tech can only bring value to a company if he's an employee versus a contractor?

I completely disagree.

And to your statement about the ?social and cultural elements? that vendors can?t replace?well, you?d better look around you, because the world is changing and you apparently aren?t paying attention. There are successful implementations; otherwise it would be a growing practice. The reason you see more people here talking about the failures of outsourcing is because people will go 10 times the length to complain about something as the will to praise it. You hear some people complain about how horrible an experience it is to go to Wal-Mart, yet millions and millions of people still go their stores every day, and they keep coming back. Why? Answer: for the lower prices. They don?t write to the paper or comments in a discussion boards saying ?I had a good experience at Wal-Mart today? because it doesn?t accomplish anything for them. But if they have a bad experience, they vent their frustrations in discussion boards like this. THAT is why you hear more disapproving comments than encouraging.

And THAT is the point I?m making. Our company has had a GOOD EXPERIENCE. I am speaking up saying it CAN work. We did it by adopting one philosophy: help them (the vendor) help you (the company). We found the right vendor that fit our needs, we thoroughly documented what we needed, then turned it over to them and helped guide them through the transition. Did we get it all right on the first try? No, not completely. But since both sides looked at the relationship as a partnership, then everyone was open to make adjustments where we needed them, and in most cases, without any additional costs.

As a consultant, I had two 'full-time' jobs where serious changes were needed. The impact for the staff in both cases was serious.

In both cases, my recommendation to the other staffers was 'dust off your resume...' Even for the survivors, it never hurts your ego to create a list of your accomplishments (i.e resume). If you are not-so-competent, perhaps you can work on your fiction writing skills. Either way, you can boost your ego and develop writing skills.

One company (Grain) desperately needed to SHOCK its IT department to eliminate turf wars (Oracle Forms vs Powerbuilder, if you can believe it). Unfortunately for them, the outsource firm started talking SAP (yikes! That's a huge step, even for a medium sized company).

The other company (Insurance) experimented with offshoring with reasonable success and then drifted mercilessly into downsizing in a pathetic knee-jerk reaction to high IT costs. What they really needed an infusion of new Technology that strategic outsourcing would have afforded them. Istead, they kept all the dead-wood. Last I heard they were still running IMS on mainframes. Glad I was cut because 'Oracle rules!' and they just didn't get it...

My recommendation to anyone worried about being cut due to any senior executive reaction to poor IT management:

'No Fear!' and 'Update your Resume'

If your manager finds your resume on your desk, encourage him or her to read it.

Cheers

I posted some ideas about outsourcing that describe situations where it is a viable alternative. You are welcome to read them and give me some feedback.

But I wonder after reading your comment, what do you think we should do? Should we go and work for McDonalds? Should we try to start our own business and try to become CEOs ourselves? Should we go and teach in a high school? A dead end job if you ask me. What's your take? Esp. for a guy who's fifty, this must be a bad time to be in IT.

... before US emplooyers will consider hiring locally again?

raelayne appears to posit the belief that the US has to match every third world nation slum-for-slum and starving-child-for-starving-child or else our "betters" in the executive suite will never hire us again.

Wal-Mart has an IT department at their head offices or at least at the one I worked at. Wal-Mart's business is to sell goods however every company needs IT people to make systems run smoothly.

is "am I doing better at what I do, in order to be more valuable than the guy in India, even at a higher cost."

Business will eventually figure out what works best -- if you're not the answer, then you need to change to become the answer.

I too was working for a fortune 500 world company for 8 yrs and became part of and IT outsource deal. GET OUT FAST. It may or may not be a total disaster for the outsourcing company (mostly it is, read on) but it is for any "cross-hired employee. I liked my job with XXX company, I did not want to be an employee of YYY co. But at the time, I thought my 8 years of complete and total knowledege of XXX IT systems would set me apart. NOT! I did not matter what I had done, what I could do, and what dedication I had.............BOTTOM LINE $$$$. I was fired. Along with 90% of my U.S. peers. Yep, India. YYY still can't make a profit, all of the XXX people are gone and now the US IT systems are a complete disaster. XXX called me last week (I had not been there for a yr) to come back aboard, they were firing the outsourcer. I promptly told them, "Sorry about your luck!" CLICK....

Yep, I am who you speak of. You've never been a part of an outsource deal I see. IT DOESNT MATTER IF YOU KEEP UP OR NOT.....I did, and was promply fired. I did make it much easier to get a new job thought...So you are 1/3 correct, 2/3's incorrect.

IBM GS..................I just read my job for the past 2 nightmare yrs....I got fired, It was the happy-ist day in my life since they took over.